Impossible to ignore validity of digital currency
When I first tried to read about bitcoins several years ago, I was hit with terms like peer-to-peer networks, block chains, and public/private key cryptography. “This is just a fad,” I told myself complacently, closing the browser. “I’ll come back next year, if they’re still around.”
But the fact remains that in recent years it has become harder and harder to ignore the rise of the digital currency.
Bitcoin, developed in 2009 by an unidentified group or person named Satoshi Nakamoto, is a cryptocurrency, a digital currency that uses cryptography to ensure its system security. Each digital bitcoin wallet has its own public address to be used only once (and changed after every use). Transactions occur when one person sends bitcoins from their wallet to another person’s address, and the exchange is complete when it is digitally signed off using the owner’s private key. Since bitcoin runs on a peer-to-peer network, this means that everything is decentralized. The system runs on the actions of its users, and there’s no central authority.
There are three key factors to remember: one, mathematically, there will always be a limited number of bitcoins; two, there are no established laws or governments involved; and finally, all transactions are designed to be irreversible. Once you’ve handed over your bitcoins, there is no way of getting them back.
The bitcoin has gained momentum lately as legitimate currency, and can even be used as payment at the Standard, a pub on Elgin Street here in Ottawa. Its fast climb into the global economic consciousness has given way to one big question: Should the bitcoin be a valid currency? The answer is yes.
The best form of currency is one that isn’t fixed, pegged to another currency, or controlled by a central authority. In other words, a currency like the bitcoin, that can float freely in an economy where its value is decided by its users. This way, it has the monetary autonomy that prevents the currency from being arbitrarily or artificially inflated by a central governing force.
Furthermore, common currency barriers, like foreign laws, economic corruption, and political instability, all become irrelevant in the face of digital currency.
Of course, because bitcoin is so young, it is still stabilizing, so using it at stores and restaurants that accept it can be risky. There are always risks of extreme fluctuation, system collapses, and hackers. However, this in no way detracts from its validity as a currency. Every single currency in the world faces different risks (inflation, runaway speculation, imbalanced trade, etc.) I think that being a freely floating currency in a system without socioeconomic or political barriers is the best thing that can happen to a currency.
With some improvements, the bitcoin could be used more widely in the coming decades, though when and if it will eventually replace paper money and coins is difficult to say.
It’s important to be forward thinking and to remember that all the things that we’ve come to take for granted today were once considered passing trends. Bitcoin deserves a chance.
